18 Questions
What type of business structure is characterized by unlimited liability?
Sole Proprietorship
What is a common source of equity finance for a business?
Retained Earnings
What is a type of debt finance that involves borrowing from a bank or other financial institution?
Overdraft
What is a key consideration in financial decision making for a business?
Maximizing Profits
What is a common ratio used to evaluate a business's financial performance?
Current Ratio
What is a key benefit of a business having a diverse range of stakeholders?
Enhanced Corporate Social Responsibility
What is a characteristic of an unincorporated business?
Owner(s) and manager(s) are the same person(s)
What is an example of external equity finance?
Share capital
What is a consideration for a business when choosing a source of finance?
The intended use of the financial funds
What type of finance includes short-term credit and long-term credit?
Debt finance
What is a source of internal finance?
Retained earnings
What is included in the costs of a source of finance?
Both A and B
What is the primary method of financing for a sole proprietorship?
Personal financial capabilities of the proprietor
Who is responsible for making management decisions in a sole proprietorship?
The sole proprietor
What is a potential problem with a sole proprietorship?
Continuity problems in the event of retirement or illness
How are profits from a sole proprietorship reported for tax purposes?
On the proprietor's personal income tax return
What is a characteristic of a sole proprietorship that affects its management?
Concentration of management authority
Why are financial requirements minimal for starting a sole proprietorship?
Because it is easy to establish, with no specific financial requirements
Explore the different types of businesses, including their sizes, sectors, and ownership forms. Learn about the various sources of finance and how businesses operate in an environment with stakeholders.
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